Question 1

Which actor in the simplified circular flow model buys or rents land, labor, and capital?

Accepted Answer

A)  Firms
B)  Households
C)  Markets for factors of production
D)  GovernmentE) B) and C)
F) A) and B)

Question 2

Economic analysis requires us to combine:

Accepted Answer

A)  unlimited resources with limited wants.
B)  theory with observations.
C)  developed and developing nations.
D)  views from different political parties.E) B) and D)
F) All of the above

Question 3

Which of the following is an example of a goal other than making a profit?

Accepted Answer

A)  Helping the poor
B)  Making great art
C)  Promoting social justice
D)  All of these are examples of goals other than making a profit.E) B) and C)
F) All of the above

Question 4

A factual claim about how the world actually works is a ______ statement.

Accepted Answer

A)  positive
B)  marginal
C)  irrational
D)  normativeE) A) and D)
F) A) and C)

Question 5

Which actor in the simplified circular flow model is on the supply side of the factor market?

Accepted Answer

A)  Firms
B)  Households
C)  Market for goods and services
D)  GovernmentE) C) and D)
F) B) and D)

Question 6

Which of the following is a problem created by scarcity?

Accepted Answer

A)  The college course you need to take in the fall is only offered at times that conflict with your work schedule.
B)  The White House eliminates tours for the public due to budget constraints.
C)  Your cell phone battery is low and you decline a phone call from a friend to conserve energy.
D)  All of these are problems created by scarcity.E) C) and D)
F) B) and D)

Question 7

Good economic models should:

Accepted Answer

A)  attempt to include every detail of the situation being studied.
B)  attempt to describe a situation with perfect accuracy.
C)  not be applied to microeconomics.
D)  describe a real-life situation accurately.E) None of the above
F) A) and D)

Question 8

Which of the following is considered a microeconomic issue?

Accepted Answer

A)  The Bureau of Economic Analysis reviews quarterly national income accounting data.
B)  A firm decides to purchase pay-per-click online advertising.
C)  The Federal Reserve increases the discount rate.
D)  The CPI reports a rise in inflation during the month of July.E) A) and C)
F) B) and C)

Question 9

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Accepted Answer

A)  II and III only
B)  I and II only
C)  III only
D)  I, II, and IIIE) B) and D)
F) A) and D)

Question 10

Which of the following is not a direct result of scarcity?

Accepted Answer

A)  Buildings in New York City are taller than buildings in Greenville, SC due to fewer acres of land per person.
B)  Due to high gas prices, Shana decides to trade her Chevy Tahoe for a Honda Accord.
C)  A college student misses a test review in order to get a few more hours of sleep.
D)  The energy industry is searching for a way to store the extra power generated by renewable energy.E) A) and B)
F) B) and D)

Question 11

The sentence "Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result." is an example of a _____ statement.

Accepted Answer

A)  marginal
B)  normative
C)  positive
D)  biasedE) B) and D)
F) C) and D)

Question 12

The deadline for your research paper is tomorrow and you anticipate you'll need a full day's worth of writing to complete the paper. Unfortunately, you are scheduled to work all day in the cafeteria. You can turn the paper in one day late for a 10 percent penalty or take the day off of work and turn the paper in by the deadline. Losing a day of wages will cost you $90. The marginal cost of turning the paper in on time is:

Accepted Answer

A)  the 10 percent penalty on your final score.
B)  $90 in forgone wages.
C)  respect from your professor.
D)  the 10 percent penalty on your score and $90 in forgone wages.E) B) and C)
F) A) and D)

Question 13

A local fast-food restaurant mails coupons for a free sandwich to every home in the community. Natasha, who is on a diet, receives one of the coupons. Which of the following is an opportunity cost of redeeming the sandwich coupon for Natasha?

Accepted Answer

A)  Lost wages due to spending time going out to eat rather than eating the Healthy Choice meal she brought to work
B)  The benefit she would receive from sticking to her "get fit for the summer" diet plan
C)  The benefit she would receive from eating a "Blastin' Burger," one of her favorite fast food options
D)  There is no opportunity cost of redeeming the coupon because the sandwich is free.E) None of the above
F) B) and C)

Question 14

Your friend comments that "A hair stylist should not have to obtain a cosmetology license." Her statement is an example of what kind of statement?

Accepted Answer

A)  Uninformed
B)  Biased
C)  Positive
D)  NormativeE) All of the above
F) B) and D)

Question 15

An incentive is:

Accepted Answer

A)  the marginal cost of engaging in a course of action.
B)  the marginal benefit of engaging in a course of action.
C)  something that changes the trade-offs people face.
D)  rational behavior that involves thinking on the margin.E) A) and D)
F) A) and B)

Question 16

Which of the following questions would a macroeconomist most likely try to answer?

Accepted Answer

A)  What stage of the business cycle is our economy currently in?
B)  Why do Broadway musicals and airlines have different price discrimination strategies?
C)  How much would marijuana consumption change if the market became legal?
D)  Should IZZE increase its distribution from national to international?E) B) and D)
F) A) and D)

Question 17

Economists assume that people choose to do something when they believe:

Accepted Answer

A)  the benefits outweigh the costs of the decision.
B)  it will make society better off.
C)  their decision cannot be questioned by anyone else.
D)  it won't harm anyone and will better themselves.E) A) and C)
F) All of the above

Question 18

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Accepted Answer

A)  The painting is given to the owner's only child.
B)  The painting is put into storage to preserve its quality.
C)  The painting is auctioned to the highest bidder.
D)  All of these are equally efficient.E) C) and D)
F) A) and C)

Question 19

Opportunity cost:

Accepted Answer

A)  only includes explicit, out-of-pocket expenses.
B)  is the value of your next best alternative.
C)  is never provided in dollar values.
D)  would not include wages lost when you take a vacation.E) B) and D)
F) All of the above

Question 20

One of the most basic models of the economy is:

Accepted Answer

A)  real GDP per capita.
B)  the current population survey.
C)  consumer expenditure.
D)  the circular flow diagram.E) None of the above
F) B) and D)

Exam 1: Economics and Life

The sentence "Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result." is an example of a _____ statement.

Correct Answer
verified

Opportunity cost:

Correct Answer
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One of the most basic models of the economy is:

Correct Answer
verified

Economists assume that people choose to do something when they believe:

Correct Answer
verified

Good economic models should:

Correct Answer
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An incentive is:

Correct Answer
verified

A local fast-food restaurant mails coupons for a free sandwich to every home in the community. Natasha, who is on a diet, receives one of the coupons. Which of the following is an opportunity cost of redeeming the sandwich coupon for Natasha?

Correct Answer
verified

Economic analysis requires us to combine:

Correct Answer
verified

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Correct Answer
verified

Which of the following questions would a macroeconomist most likely try to answer?

Correct Answer
verified

Your friend comments that "A hair stylist should not have to obtain a cosmetology license." Her statement is an example of what kind of statement?

Correct Answer
verified

A factual claim about how the world actually works is a ______ statement.

Correct Answer
verified

Correct Answer
verified

Which actor in the simplified circular flow model buys or rents land, labor, and capital?

Correct Answer
verified

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Correct Answer
verified

Which of the following is an example of a goal other than making a profit?

Correct Answer
verified

Which of the following is not a direct result of scarcity?

Correct Answer
verified

Which of the following is considered a microeconomic issue?

Correct Answer
verified

Which of the following is a problem created by scarcity?

Correct Answer
verified

Which actor in the simplified circular flow model is on the supply side of the factor market?

Correct Answer
verified

Exam 1: Economics and Life

The sentence "Economies that adopt more open trade policies have often historically enjoyed faster economic growth rates as a result." is an example of a _____ statement.

Correct AnswerverifiedShow Answer

Opportunity cost:

Correct AnswerverifiedShow Answer

One of the most basic models of the economy is:

Correct AnswerverifiedShow Answer

Economists assume that people choose to do something when they believe:

Correct AnswerverifiedShow Answer

Good economic models should:

Correct AnswerverifiedShow Answer

An incentive is:

Correct AnswerverifiedShow Answer

A local fast-food restaurant mails coupons for a free sandwich to every home in the community. Natasha, who is on a diet, receives one of the coupons. Which of the following is an opportunity cost of redeeming the sandwich coupon for Natasha?

Correct AnswerverifiedShow Answer

Economic analysis requires us to combine:

Correct AnswerverifiedShow Answer

The principles of economics can explain which of the following?Why people choose to work or go to collegeWhy a country might prosperHow the value of money changes over time

Correct AnswerverifiedShow Answer

Which of the following questions would a macroeconomist most likely try to answer?

Correct AnswerverifiedShow Answer

Your friend comments that "A hair stylist should not have to obtain a cosmetology license." Her statement is an example of what kind of statement?

Correct AnswerverifiedShow Answer

A factual claim about how the world actually works is a ______ statement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which actor in the simplified circular flow model buys or rents land, labor, and capital?

Correct AnswerverifiedShow Answer

Suppose the owner of a rare piece of art has recently died, and their will specified that an economist should make sure that the painting is passed on "efficiently". Which of the following methods is most likely to result in efficiency?

Correct AnswerverifiedShow Answer

Which of the following is an example of a goal other than making a profit?

Correct AnswerverifiedShow Answer

Which of the following is not a direct result of scarcity?

Correct AnswerverifiedShow Answer

Which of the following is considered a microeconomic issue?

Correct AnswerverifiedShow Answer

Which of the following is a problem created by scarcity?

Correct AnswerverifiedShow Answer

Which actor in the simplified circular flow model is on the supply side of the factor market?

Correct AnswerverifiedShow Answer

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